Question

The moving average crossover rule A. is a fundamental approach to forecasting exchange rates. B. states that a crossover of the short-term moving average above the long-term moving average signals that the foreign currency is appreciating. C. states that a crossover of the short-term moving average above the long-term moving average signals that the foreign currency is depreciating. D. none of the options

Answer 1

B. states that a crossover of the short-term moving average above the long-term moving average signals that the foreign currency is appreciating.

Step-by-step explanation:

Before you know what the moving average crossover rule is, you should know what a moving average is. In summary, a moving average is an economic representation that smooths active asset price movements, allowing Traders to visualize the trends that these movements establish, in relation to a given currency.

Based on this, the moving average crossover rule is an economic strategy, which through the concept of moving averages is able to relate the appropriate time to buy, when the faster moving average is able to cross over more in a bottom-up movement. In addition, this rule establishes that a crossing of the short-term moving average above the long-term moving average signals that the foreign currency is appreciating.